[Federal Register Volume 64, Number 234 (Tuesday, December 7, 1999)]
[Notices]
[Pages 68316-68320]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-31674]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration
[A-412-810]


Certain Hot-Rolled Lead and Bismuth Carbon Steel Products from 
the United Kingdom: Preliminary Results of Antidumping Administrative 
Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce

ACTION: Notice of preliminary results of antidumping duty 
administrative review.

-----------------------------------------------------------------------

SUMMARY: The Department of Commerce is conducting an administrative 
review of the antidumping duty order on certain hot-rolled lead and 
bismuth carbon steel products from the United Kingdom in response to 
requests by the respondent, British Steel Engineering Steels Limited, 
and the petitioners, Ispat Inland Inc. and USS/KOBE Steel Co.

[[Page 68317]]

This review covers the period March 1, 1998, through February 28, 1999.
    We have preliminarily determined that sales have been made below 
normal value. Interested parties are invited to comment on these 
preliminary results. If these preliminary results are adopted in our 
final results of administrative review, we will instruct the Customs 
Service to assess antidumping duties on all appropriate entries.

EFFECTIVE DATE: December 7, 1999.

FOR FURTHER INFORMATION CONTACT: Rebecca Trainor or David J. 
Goldberger, Office 2, AD/CVD Enforcement Group I, Import 
Administration, Room B099, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington D.C. 20230; telephone (202) 482-4007, or 482-4136, 
respectively.

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Act), are references to the provisions effective 
January 1, 1995, the effective date of the amendments made to the Act 
by the Uruguay Round Agreements Act (URAA). In addition, unless 
otherwise indicated, all citations to the Department of Commerce's (the 
Department's) regulations are to the regulations at 19 CFR Part 351 
(1998).

SUPPLEMENTAL INFORMATION:

Background

    On March 22, 1993, the Department published in the Federal Register 
the antidumping duty order on certain hot-rolled lead and bismuth 
carbon steel products from the United Kingdom (58 FR 15324).
    On March 9, 1999, we published in the Federal Register (64 FR 
11439) a notice of opportunity to request an administrative review of 
the antidumping duty order on certain hot-rolled lead and bismuth 
carbon steel products from the United Kingdom covering the period March 
1, 1998, through February 28, 1999.
    In accordance with 19 CFR 351.213(b)(1), both British Steel 
Engineering Steels Limited (BSES) and the petitioners requested that we 
conduct this administrative review. We published a notice of initiation 
of this antidumping duty administrative review on April 22, 1999 (64 FR 
23269).
    The Department is conducting this administrative review in 
accordance with section 751 of the Act.

Scope of the Review

    The products covered by this review are hot-rolled bars and rods of 
nonalloy or other alloy steel, whether or not descaled, containing by 
weight 0.03 percent or more of lead or 0.05 percent or more of bismuth, 
in coils or cut lengths, and in numerous shapes and sizes. Excluded 
from the scope of this review are other alloy steels (as defined by the 
Harmonized Tariff Schedule of the United States (HTSUS) Chapter 72, 
note 1 (f)), except steels classified as other alloy steels by reason 
of containing by weight 0.4 percent or more of lead, or 0.1 percent or 
more of bismuth, tellurium, or selenium. Also excluded are semi-
finished steels and flat-rolled products. Most of the products covered 
in this review are provided for under subheadings 7213.20.00.00 and 
7214.30.00.00 of the HTSUS. Small quantities of these products may also 
enter the United States under the following HTSUS subheadings: 
7213.31.30.00; 7213.31.60.00; 7213.39.00.30; 7213.39.00.60; 
7213.39.00.90; 7213.91.30.00; 7213.91.45.00; 7213.91.60.00; 7213.99.00; 
7214.40.00.10, 7214.40.00.30, 7214.40.00.50; 7214.50.00.10; 
7214.50.00.30, 7214.50.00.50; 7214.60.00.10; 7214.60.00.30; 
7214.60.00.50; 7214.91.00; 7214.99.00; 7228.30.80.00; and 
7228.30.80.50. HTSUS subheadings are provided for convenience and 
customs purposes. The written description of the scope of this 
proceeding is dispositive.

Normal Value Comparisons

    To determine whether sales of the subject merchandise by BSES to 
the United States were made at less than normal value (NV), we compared 
export price (EP) to the NV, as described in the ``Export Price'' and 
``Normal Value'' sections of this notice.
    Pursuant to section 777A(d)(2) of the Act, we compared the EPs of 
individual U.S. transactions to the monthly weighted-average NV of the 
foreign like product where there were sales made at prices above the 
cost of production (COP), as discussed in the ``Cost of Production 
Analysis'' section, below, and where these sales were otherwise in the 
ordinary course of trade.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by BSES covered by the description in the ``Scope of 
the Review'' section, above, to be foreign like products for purposes 
of determining appropriate product comparisons to U.S. sales. We 
compared U.S. sales to sales made in the home market within the 
contemporaneous window period, which extends from three months prior to 
the U.S. sale until two months after the sale. See 19 CFR 
351.414(e)(2). Where there were no sales of identical merchandise in 
the home market made in the ordinary course of trade to compare to U.S. 
sales, we compared U.S. sales to the most similar foreign like product 
sold in the ordinary course of trade. In making the product 
comparisons, we matched foreign like products based on the physical 
characteristics identified in the June 10, 1999, questionnaire in the 
following order: chemical composition, shape, cut (i.e., coil or cut-
to-length), size range, and grade.
    We have accepted the additional product characteristic variations 
reported by BSES for chemical composition, shape, and cut, as these 
characteristics have been used for model matching in previous 
administrative reviews of BSES' sales. We have not modified the size 
range groups from those specified in the questionnaire, as requested by 
BSES in its September 24, 1999, letter, because there is no basis on 
the record to support BSES' claim that this modification reflects a 
``generally accepted dividing line between rod and bar.''
    Consistent with our practice (see, e.g., Final Results of 
Antidumping Duty Administrative Review: Cold-Rolled Carbon Steel Flat 
Products from the Netherlands, 61 FR 48465, 48466, September 13, 1996), 
we compared prime quality product sold in the United States to 
identical prime quality product sold in the home market. Where there 
were no home market sales of identical prime quality product sold in 
the ordinary course of trade, we compared the U.S. sales of prime 
quality product to the most similar prime quality foreign like product 
sold in the ordinary course of trade, based on the characteristics 
listed above. There were no U.S. sales of second quality product during 
the period of review (POR), March 1, 1998, through February 28, 1999.

Export Price

    We based United States price on EP, as defined in section 772(a) of 
the Act, because the merchandise was sold directly by the exporter to 
unaffiliated U.S. purchasers prior to the date of importation and 
constructed export price was not otherwise indicated by the facts of 
record. When sales are made prior to importation through an affiliated 
or unaffiliated U.S. sales agent to an unaffiliated customer in the 
United States, our practice is to examine several criteria in order to 
determine whether the sales are EP sales. Those criteria are: (1) 
whether the merchandise was shipped directly from the

[[Page 68318]]

manufacturer to the unaffiliated U.S. customer; (2) whether this was 
the customary commercial channel between the parties involved; and (3) 
whether the function of the U.S. selling agent was limited to that of a 
``processor of sales-related documentation'' and a ``communications 
link'' with the unaffiliated U.S. buyer. Where all three criteria are 
met, indicating that the activities of the U.S. selling agent are 
ancillary to the sale, the Department has determined the sales to be EP 
sales (see, e.g., Notice of Final Determination of Sales at Less Than 
Fair Value: Stainless Steel Wire Rod from Italy, 63 FR 40422, 40424-25, 
July 29, 1998). In the instant review, the merchandise was shipped 
directly from the manufacturer to the unaffiliated U.S. customer and 
this was the customary channel between the parties involved. The role 
of BSES' U.S. subsidiary was limited only to providing marketing 
support and referring customer inquiries to the parent company. Thus, 
the above-referenced criteria have been met, and we have treated all 
U.S. sales as EP sales.
    We calculated EP based on packed, delivered prices to customers in 
the United States. We made deductions, where applicable, for foreign 
inland freight, FOB charges in the United Kingdom, ocean freight, 
marine insurance, U.S. customs duties, brokerage and handling charges, 
merchandise processing fees, and U.S. inland freight charges, in 
accordance with section 772(c)(2) of the Act. We also made adjustments 
for invoice corrections.

Normal Value

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating NV, 
the Department compared BSES's volume of home market sales of the 
foreign like product to its volume of U.S. sales of the subject 
merchandise, in accordance with sections 773(a)(1) (B) and (C) of the 
Act. Because BSES' aggregate volume of home market sales of the foreign 
like product was greater than five percent of its aggregate volume of 
U.S. sales of the subject merchandise, we determined that the home 
market provides a viable basis for calculating NV. See also 19 CFR 
351.404(b).
    Many of BSES' home market sales were made to affiliated original 
equipment manufacturers (OEMs) and resellers. With respect to 
affiliated resellers, BSES reported the sales made by the affiliated 
reseller to the unaffiliated customer, in accordance with the 
requirements of the Department's questionnaire. It is the Department's 
practice, in situations where home market sales are made to affiliated 
parties, to determine whether it is appropriate to use such sales as 
the basis of NV by comparing the prices of those sales to the prices of 
sales to unaffiliated parties, on a model-by-model basis (see, e.g., 
Final Results of Antidumping Duty Administrative Reviews, Partial 
Termination of Administrative Reviews, and Revocation in Part of 
Antidumping Duty Orders; Antifriction Bearings (Other Than Tapered 
Roller Bearings) and Parts Thereof from France, et al., 60 FR 10899, 
10900, February 28, 1995; and 19 CFR 351.403(c)). With respect to BSES' 
home market sales to affiliated OEMs during the POR, we tested these 
sales to ensure that, on average, the affiliated-party sales were made 
at arm's length. To conduct this test, we compared the weighted-average 
gross unit prices of sales to affiliated and unaffiliated customers at 
the same level of trade (LOT), where possible, net of all movement 
charges, direct selling expenses, invoice corrections, rebates, and 
packing. As a result of our arm's-length test, we disregarded sales to 
the affiliated customers in the home market where the prices charged to 
an affiliated customer were on average less than 99.5 percent of the 
prices charged to unaffiliated customers (see, e.g., Final Results of 
Antidumping Duty Administrative Review; Certain Welded Carbon Steel 
Pipes and Tubes from Thailand 62 FR 53809, 53817, October 16, 1997).
    We did not require BSES to provide downstream sales by the 
affiliated OEM customers because these customers further manufactured 
the subject merchandise into merchandise not covered by the order. With 
respect to downstream sales by the affiliated resellers, we used them 
in our determination of NV, where appropriate, because BSES' sales to 
its affiliated customers accounted for more than five percent of BSES' 
total sales in its home market (see 19 CFR 351.403(d)).
    In accordance with section 773(a)(1)(B)(i) of the Act, to the 
extent practicable, we based NV on sales at the same LOT as the EP 
sale. If NV was calculated at a different LOT, we made an adjustment, 
in accordance with section 773(a)(7) of the Act (see ``Level of Trade'' 
section below).

Level of Trade

    In accordance with section 773(a)(1)(B)(i) of the Act, to the 
extent practicable, we determine NV based on sales in the comparison 
market at the same LOT as the EP transaction. The NV LOT is that of the 
starting-price sales in the comparison market or, when NV is based on 
CV, that of the sales from which we derive selling, general and 
administrative (SG&A) expenses and profit. For EP, the LOT is also the 
level of the starting-price sale, which is usually from the exporter to 
an unaffiliated U.S. customer. To determine whether NV sales are at a 
different LOT than EP sales, we examined stages in the marketing 
process and selling functions along the chain of distribution between 
the producer and the unaffiliated customer. If the comparison-market 
sales are at a different LOT and the difference affects price 
comparability, as manifested in a pattern of consistent price 
differences between the sales on which NV is based and comparison-
market sales at the LOT of the export transaction, we make a LOT 
adjustment under section 773(a)(7)(A) of the Act.
    To determine whether different LOTs exist, we examined the 
respondent's distribution systems, including selling functions, classes 
of customers, and selling expenses. BSES reported two channels of 
distribution in the home market: (1) sales produced to order and 
shipped from the mill directly to unaffiliated OEMs (Channel 1 sales); 
and (2) sales by affiliated resellers to unaffiliated OEMs (Channel 2 
sales). In analyzing the information submitted, we found that the two 
home market channels differ with respect to selling activities. Channel 
2 sales involved additional selling activities including: maintenance 
of inventory; small lot sales; cutting into short lengths; and 
rebundling into smaller weight bundles. None of these activities is 
typical of mill direct sales to Channel 1 customers. Further, we found 
that these channels constitute different stages in the marketing 
process. Based on this analysis, we find that the two home market 
channels of distribution comprise two LOTs.
    BSES reported EP sales in the U.S. market, which were made to order 
by BSES, and shipped directly to unaffiliated OEMs in the United 
States. We found that EP sales involved the same selling functions and 
therefore were sold at the same marketing stage as BSES' home market 
Channel 1 sales, described above. Therefore, we have determined that 
the LOT for all EP sales is the same as Channel 1 in the home market. 
Accordingly, we have compared the U.S. sales to sales at the same LOT 
in the home market when possible. If we found no contemporaneous home 
market Channel 1 sales of the identical or most similar product, we 
matched the

[[Page 68319]]

EP sale to home market Channel 2 sales of that product. Because we 
compared sales at different LOTs in some instances, we examined whether 
a LOT adjustment was appropriate. Based on our analysis, we determined 
that there was a pattern of consistent price differences between the 
Channel 1 and Channel 2 LOTs in the home market. Therefore, when we 
compared sales at different LOTs, we made an adjustment in accordance 
with section 773(a)(7)(A) of the Act. (See Memorandum to the File from 
The Team dated December 1, 1999, for further explanation.)

Cost of Production Analysis

    Pursuant to section 773(b) of the Act, for this POR, we initiated 
an investigation of sales at less than the COP. We did so because, in 
the final results of the most recent administrative review of BSES, we 
determined that BSES made home market sales that were below the COP and 
were consequently disregarded (see Final Results of Antidumping Duty 
Administrative Review; Certain Hot-Rolled Lead and Bismuth Carbon Steel 
Products from the United Kingdom, 64 FR 43673, August 11, 1999). 
Therefore, in accordance with section 773(b)(2)(A)(ii) of the Act, we 
had reasonable grounds to believe or suspect that BSES made sales at 
less than the COP during this review period. Before making any NV 
comparisons, we conducted the COP analysis described below.

A. Calculation of COP

    Pursuant to section 773(b)(3) of the Act, we calculated the COP 
based on the sum of BSES' cost of materials and fabrication employed in 
producing the foreign like product, plus amounts for home market 
general and administrative expenses. We relied on the home market sales 
and COP information provided by BSES in its questionnaire response.

B. Test of Home Market Prices

    After calculating COP, we tested whether home market sales of hot-
rolled lead and bismuth carbon steel were made at prices below the COP 
within an extended period of time in substantial quantities, and 
whether such prices permitted recovery of all costs within a reasonable 
period of time. We compared the model-specific COP to the reported home 
market prices less any applicable invoice corrections, movement 
charges, rebates, direct and indirect selling expenses, and packing 
costs.

C. Results of COP Test

    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of the respondent's sales of a specific model were at prices 
less than the COP, we did not disregard any below-cost sales of that 
product because we determined that the below-cost sales were not made 
in ``substantial quantities.'' Where 20 percent or more of the 
respondent's sales of a specific model during the POR were at prices 
less than the COP, we disregarded the below-cost sales because we 
determined that the below-cost sales were made within an extended 
period of time in ``substantial quantities'' in accordance with 
sections 773(b)(2)(B) and (C) of the Act, and because, based on our 
comparisons of prices to weighted-average COPs for the POR, we 
determined that the below-cost sales of the product were at prices 
which would not permit recovery of all costs within a reasonable period 
of time, as defined in section 773(b)(2)(D) of the Act. Based on this 
test, we disregarded certain below-cost home market sales made by BSES.

Comparisons

    Pursuant to section 777A(d)(2) of the Act, we compared the EPs of 
individual transactions to the monthly weighted-average price of sales 
of the foreign like product where there were sales at prices above COP, 
as discussed above. We based NV on packed, delivered prices to 
unaffiliated purchasers in the home market, and to affiliated 
purchasers in the home market to the extent that prices were at arm's 
length. We made adjustments to home market price, where applicable, in 
accordance with section 773(a)(6) of the Act, for invoice corrections, 
rebates, and inland freight. We also made circumstance-of-sale 
adjustments for differences in credit, credit insurance and warranty 
expenses pursuant to section 773(a)(6)(C)(iii) of the Act. In order to 
adjust for differences in packing between the two markets, we increased 
home market price by the amount of U.S. packing costs and reduced it by 
the amount of home market packing costs, pursuant to 773(a)(6)(A) and 
(B) of the Act. We made adjustments, where appropriate, for physical 
differences in merchandise, in accordance with section 773(a)(6)(C)(ii) 
of the Act, and for differences in LOT, in accordance with section 
773(a)(7)(A) of the Act.

Preliminary Results of the Review

    As a result of our comparison of EP and NV, we preliminarily 
determine that the following weighted-average dumping margin exists:

------------------------------------------------------------------------
                                                                Margin
          Manufacturer/exporter                 Period        (percent)
------------------------------------------------------------------------
British Steel Engineering Steels Limited     3/1/98-2/28/99         3.01
 (BSES) (formerly United Engineering
 Steels Limited)........................
------------------------------------------------------------------------

    We will disclose the calculations used in our analysis to parties 
to this proceeding within five days of the publication date of this 
notice. See 19 CFR 351.224(b). Any interested party may request a 
hearing within 30 days of publication. See 19 CFR 351.310(c). Any 
hearing, if requested, will be held 44 days after the date of 
publication or the first business day thereafter.
    Issues raised in the hearing will be limited to those raised in the 
respective case briefs and rebuttal briefs. Case briefs from interested 
parties and rebuttal briefs, limited to the issues raised in the 
respective case briefs, may be submitted not later than 30 days and 35 
days, respectively, from the date of publication of these preliminary 
results (see 19 CFR 351.309(c) and (d)). Parties who submit case briefs 
or rebuttal briefs in this proceeding are requested to submit with each 
argument (1) a statement of the issue and (2) a brief summary of the 
argument. Parties are also encouraged to provide a summary of the 
arguments not to exceed five pages and a table of statutes, regulations 
and cases cited.
    The Department will subsequently issue the final results of this 
administrative review, including the results of its analysis of issues 
raised in any such written briefs or at the hearing, if held, not later 
than 120 days after the date of publication of this notice.
    Interested parties who wish to request a hearing or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, Room B-099, within 30 days of the 
date of publication of this notice. Requests should contain: (1) The 
party's name, address and telephone number; (2) the number of 
participants; and (3) a list of issues to be discussed (see 19 CFR 
351.310(c)).

Assessment Rates

    The Department shall determine, and the Customs Service shall 
assess,

[[Page 68320]]

antidumping duties on all appropriate entries. The Department will 
issue appropriate appraisement instructions directly to the Customs 
Service upon completion of this review. The final results of this 
review shall be the basis for the assessment of antidumping duties on 
entries of merchandise covered by this review and for future deposits 
of estimated duties. We will instruct the Customs Service to assess 
antidumping duties on all appropriate entries covered by this review if 
any importer-specific assessment rate calculated in the final results 
of this review is above de minimis. For assessment purposes, we intend 
to calculate importer-specific assessment rates for the subject 
merchandise by aggregating the dumping margins calculated for all U.S. 
sales examined and dividing this amount by the total quantity sold.

Cash Deposit Requirements

    The following cash deposit requirements will be effective for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(1) of the Act: (1) The cash deposit rate for the reviewed 
company will be that established in the final results of this review, 
except if the rate is less than 0.50 percent, and therefore, de minimis 
within the meaning of 351.106(c)(1), in which case the cash deposit 
rate will be zero; (2) for previously reviewed or investigated 
companies not listed above, the cash deposit rate will continue to be 
the company-specific rate published for the most recent period; (3) if 
the exporter is not a firm covered in this review, a prior review, or 
the original less-than-fair-value (LTFV) investigation, but the 
manufacturer is, the cash deposit rate will be the rate established for 
the most recent period for the manufacturer of the merchandise; and (4) 
the cash deposit rate for all other manufacturers or exporters will 
continue to be 25.82 percent, the ``All Others'' rate made effective by 
the LTFV investigation. These requirements, when imposed, shall remain 
in effect until publication of the final results of the next 
administrative review.

Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f) to file a certificate regarding 
the reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review and notice are published in accordance 
with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: December 1, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-31674 Filed 12-6-99; 8:45 am]
BILLING CODE 3510-DS-P